Dominion Motors & Controls, Ltd.
1) The problem:
DMC's potential loss of significant market share in the near and long term, of oil well pumping motors if DMC doesn't respond quickly and effectively to the expected change in motor specs for the industry.
2) Causes of the problem:
Hearsay concerning a study by the trend setting buyer in the market, which, if true, will promote the motors of DMC competitors and relegate DMC to third choice in the oil pumping market.
Also DMC's perceived late discovery of the study. (Other manufacturers don't seem to know so DMC may still be ahead of the others in information, but their machine is 3rd choice so timely information is more critical to DMC)
3) Is this a brush fire or an important problem?
1000 wells per year over the next 5 years (possibly more) DMC has ~51%=510. per year=2550 over 5yrs ( plus whatever replacements)
510/yr @$1200=$612000.yr
(1200.= price of 7 ½ hp which is 3rd in torque but above 70pf or the price of the 10hp reduces to the 71/2hp price)
(Potential $loss if reduce price = 94962.yr but losing market would be a bigger problem.)
612,000/85,000,000= .0072% (~3/4 of 1% of revenues in 1-200hp market { what % is 5-10hp sales?})
If DMC loses Hamilton, other than lost dollars, which doesn't seem to be significant, DMC could lose brand image and reputation as a result of being downgraded in the industry. This could be worse than lost dollars. In addition it could lose the industry by losing the leader of the industry. Although this market is a small slice of DMC's revenues, one cannot afford to easily lose market share. In addition, this could have spill over affects in ...